Sky moved into the crosshairs as activist Elliott builds shareholding

 
Oliver Gill
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An auction for Premier League TV rights kicks off next month (Source: Getty)

Activist hedge fund Elliott Capital Advisors has established a chunky stake in Sky, as the media behemoth prepares to navigate a pivotal few months.

Elliott, which hit the headlines demanding change at Dulux-owner Akzo Nobel last year, announced a 1.09 per cent stake through a derivatives stake, according to a filing on Friday.

Last week competition regulators revealed preliminary findings into 21st Century Fox's proposed takeover of the 61 per cent Sky shares it does not already own. The Competition and Markets Authority (CMA) said the Fox takeover of Sky would exert too much influence over public opinion and news providers in the UK – known as media plurality.

But markets were buoyed the deal would be given the green light – with some remedies – after the regulator said in relation to a “genuine commitment to broadcasting standards”, the merger is not expected to operate against the public interest.

Read more: Sky launches original films as it ramps up drive into new content

Culture secretary Matt Hancock said Disney's $52bn (£37bn) planned takeover of parts of Fox “could address concerns set out in the provisional findings”. A final copy of the report is due to be filed by 1 May with Hancock making a go/no-go decision by mid-June.

Meanwhile, last Thursday Sky announced a 10 per cent rise in first-half earnings.

On 8 February a Premier League football TV rights auction kicks off. A recent platform-sharing arrangement between Sky and fierce rival BT has prompted many City analysts to cut the projected cost to those winning rights packages.

FANG (Facebook, Amazon, Netflix and Google) entrants into the Premier League auction are "overhyped", according to Liberum analyst Ian Whittaker, who believes the cost of the rights will rise by around five per cent rather than the 15 per cent previously expected. Amazon is best placed of the four and may win some rights, he said.

Elliott's interest in Sky comes after the Paul Singer-founded fund took a 1.7 per cent stake in engineer GKN and a 1.7 per cent short position in suitor Melrose Industries.

Read more: Murdoch's Sky takeover boosted by Mickey Mouse deal

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